The Rangarajan Committee on the production-sharing contract (PSC) mechanism in the petroleum industry has recommended major changes, which would alter the parameters of exploration and production (E&P) and have a major knock-on effect on consumers in the fertiliser, power, transport and household sectors. The committee recommends all domestic gas prices be linked to an averaged price that takes into account the landed price of Indian liquefied natural gas imports, the customs-cleared price of LNG imports into Japan (JCC) and prices at major international trading points. The pricing would be equal for all consumers, though gas would be allocated on a priority basis to the power and fertiliser industries. The formula would apply only to new contracts and would, at current rates, hike Indian gas prices to about $8.1 per mmBtu (million metric British thermal units), from $4.2 per mmBtu.

A first step forward

Business Standard

Reports of the impending &lsquo;fiscal cliff&rsquo;, which spooked businesses and financial markets, did little to dampen spending by shoppers in the US this holiday season.

US shoppers shrug off budget debate

The goals articulated in the Centre&rsquo;s new Science, Technology and Innovation Policy (STI 2013) are both ambitious and unexceptionable. STI is key to addressing a host of issues concerning energy and food security, nutrition, health care, environment, water, sanitation and, ultimately, employment generation. The policy paradigm is to be &ldquo;inclusive innovation&rdquo;, where STI furthers the aims of faster, inclusive and sustainable growth. STI integration is also the bedrock of the National Action Plan on Climate Change (NAPCC) and the policy seeks to support STI-led services for increasing transparency in government functioning. Specific time-bound goals have been set. The prime minister, addressing the Indian Science Congress last week, said that STI 2013 aimed to position India among the &ldquo;top five scientific powers&rdquo; by 2020. Technology missions will target global leadership in select areas.

First, a scientific temper

Many investors, mostly overseas, have often expressed concerns about India Inc&rsquo;s opaque corporate governance practices. In that context, the Securities and Exchange Board of India&rsquo;s (Sebi&rsquo;s) decision to put the issue of governance under the spotlight is welcome. The proposals aim to make Clause 49 of the listing agreement, which spells out corporate governance rules, relevant. This follows the passage of the Companies Bill by the Lok Sabha last month. The suggestions are intended to make companies more accountable to minority shareholders, who have been affected by certain actions by promoter-controlled firms.

Principles and rules

Every Monday, Business Standard analyses one family&rsquo;s finances and suggests a suitable way forward(Click on graphics)

Case study

When selling shares in an open offer, two things have to be kept in mind. One, the price being offered and two, the tax implication. In most cases, as soon as the open offer price is announced, there is a sharp surge in the share price as traders reduce the gap between the existing and offer price, in the hope that the company will be forced to hike the open offer price further. They are taxed like debt funds &mdash; 10 per cent with indexation and 20 per cent with indexation benefits.

Tipping point

Business Standard brings to you a snapshot of average current rates and unit sizes in localities that offer property in the price range of Rs 50 lakh to Rs 1 crore.

Realty check

My father, 63, is a cardiac patient; he suffered his first heart attack three years ago.

General Insurance: K K Mishra

India all too often confuses law-making with implementation. In this troubled aftermath of the horrific rape of a 23-year-old in a private bus in Delhi last month, attention is again being paid to how laws could be changed to ensure that the impunity with which such assaults happen is reduced. A committee led by former Chief Justice J S Verma is examining possible changes to the laws governing the punishment of sexual offences, particularly rape. It is hopefully unlikely that the calls of the more extreme protestors for hanging or chemical castration as a punishment for rape will find their way into the commission&rsquo;s recommendations. And there are indeed some changes that could be made to India&rsquo;s antiquated rape laws &mdash; provisions to recognise marital rape need to be strengthened and the permission to examine the victim&rsquo;s sexual history needs to be delegitimised.

Reforming India's police

It is not common for a state unit president of a party to be replaced overnight. But in December, the abrupt replacement of Prabhat Jha as the Bharatiya Janata Party (BJP) chief of Madhya Pradesh with Narendra Tomar has sent alarm bells ringing in the BJP. Jha said at a public meeting &ndash; in the presence of Chief Minister Shivraj Singh Chouhan &ndash; that the decision to remove him &ldquo;was kept as secret as Pokharan nuclear test that the nation conducted under the leadership of Prime Minister Atal Bihari Vajpayee&rdquo;.

A clandestine affair

A senior party leader went to meet Congress President Sonia Gandhi to complain about the man who was heading the party in his state. After she had heard the litany of complaints, Gandhi held her head in her hands. &ldquo;We have a region called Sicily. Have you heard of the Sicilian mafia?&rdquo; she asked. &ldquo;Madam, the Sicilian mafia could learn a thing or two from him,&rdquo; replied the leader.

The real mafia

Equity and equity-linked issuances by Indian companies raised $14.9 billion from 101 new issues last year, a 72 per cent rise compared to 2011(Click on graphics)
&nbsp;

Equity issuances in 2012

This refers to the editorial &ldquo;A long-overdue raise&rdquo; (January 3). You have rightly advocated an immediate increase in diesel prices. But in the light of the current political situation, that would be a huge step. However, even a small step like levying an additional duty on diesel-driven cars and sports utility vehicles is not being taken by the Central government. Both the ruling United Progressive Alliance (UPA) and the opposition parties, particularly the Bharatiya Janata Party (BJP), have shown scant regard for implementing a long-term policy on commodity taxation and fixing prices of petroleum products. Since crude price is beyond the government&rsquo;s control, the only logical step is to put in place a rational policy on taxation of all petroleum products. The BJP leaders have conveniently left it to the UPA to toy with different approaches &mdash; most of which are haphazard.

Letters: Is a diesel price hike viable?

The February 2012 issue of Bloomberg Markets magazine has the annual rankings of the world's richest hedge funds. The list of 100 comprise the list of best-performing hedge funds managing $1 billion or more. The rankings are based on data compiled by Bloomberg specialist Anibal Arrascue and information supplied by hedge-fund research firms, hedge funds and investors.

Top-performing hedge funds

Urjit Patel, the deputy governor designate of the Reserve Bank of India, is set to head the monetary policy department. In his new role, the 49-year-old might have to do some nuancing of his views. In his writings, Patel has been a heavy critic of RBI&rsquo;s performance in dealing with inflation.

Will Mr Patel change his views?

&ldquo;In a society in which women were culturally brainwashed into believing that they are inferior to men, mindsets do not allow for voluntary nomination of women on corporate boards.

Should the government mandate women directors on corporate boards?

Policy makers in India are justifiably rattled by the soaring gold demand, which has pushed the current account deficit in the second quarter of 2012-13 to a record 5.4 per cent of gross domestic product. Gold is the biggest contributor to imports after crude oil, widening the country&rsquo;s trade and current account deficits. In the absence of adequate foreign capital flows, it also raises questions about India&rsquo;s foreign exchange reserves buffer and its external vulnerability.

Solving the gold riddle 

Last year, United Progressive Alliance Chairperson Sonia Gandhi&rsquo;s son-in-law Robert Vadra made famous the phrase &ldquo;Mango people in Banana Republic&rdquo;. This year, the words &ldquo;dented and painted&rdquo; used in such controversial circumstances by President Pranab Mukherjee&rsquo;s son Abhijit Mukherjee have become the latest favourite. A finance ministry official asked about possible changes in tax structure in the Budget 2013 said, &ldquo;There will just be some denting and painting.&rdquo; Many of his colleagues are now often heard using this phrase in various contexts.

Budget, dented & painted

Why was the slogan for the government&rsquo;s cash transfer scheme modified from &ldquo;aapka paisa, aapke haath&rdquo; to the more mundane direct benefit transfer, or DBT? Pure functionalism, Finance Minister P Chidambaram explained at a press conference. &ldquo;Aapka paisa, aapke haath&rdquo; connected better with the people, he said, and was set to be used on political platforms, but in government terminology, DBT was more apt.

Apnaa DBT?

The finance ministry may have gone out of bounds for reporters and other visitors owing to Budget preparations, but there are some guests that often visit the North Block without any gate pass or permission. After a hiatus of some years, monkeys are back in the building, which has become something of a permanent residence for rats, cats and pigeons. Over the last few days, rhesus monkeys have been spotted fearlessly roaming the corridors of North Block in hoards. They certainly ease the job of the Intelligence Bureau personnel in keeping outsiders in abeyance from access to the Budget-making exercise.

Simian security

This refers to the report &ldquo;Is Chidambaram&rsquo;s plan to create big banks feasible?&rdquo; (December 28). In the 2008 global financial crisis, biggies like Lehman Brothers and Bear Sterns &ndash; which suffered huge losses and even faced bankruptcy &ndash; were investment banks dependent on deposit-taking banks, and not deposit-taking banks themselves. Most big deposit-taking banks (such as Citibank and J P Morgan) in Britain and the US survived. On the other hand, roughly over 165 small banks failed in the US in 2008-09. Overall, the impact of the global recession was not as severe on deposit-taking banks as on non-deposit-taking banks in the West. Big banks can give big loans, harness big deposits and attract capital-infusion easily (Industrial and Commercial Bank of China had the largest initial public offering in the world).

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